Why software is not always a commodity and where does IT profit

Since the 16th century, the current production system in which we live has evolved. This system is reflected in all areas, but in IT it receives a new continuation, a new birth. This article is about why software is creating a new landscape of economic relations and why IT has a lot of money. But more importantly, I hope the attentive reader will think about which company he works in and which one he would like to go to work.


Description of software as a product


The software is distributed by several models. Most often, the distribution model is mixed, specializing in each end case. But for the purpose of analysis, extreme, opposite cases should be considered.


On the one hand, in the form of a product specialized for the customer, which the development company makes to the buyer according to the transaction, ideally supported by technical documentation. Often such contracts are associated with the development of a specific product for a particular company or government orders. Such work from one contract to another requires a repeated application of labor - again and again, developers will write new products that are separate for each individual customer. I would call such work unscalable .


On the other hand, there is a sale of software as a copy of the same product. Thus we buy games, office suites, IDEs and so on. In this model, the product is produced only once, and then it is reproduced by simple copying and the corresponding work will be called scalable .


As mentioned above, extreme cases are interesting for consideration. Intermediate forms, however, should not be interesting because they are decomposed in terms of content into more atomic components, which in turn constitute these extreme cases. For example, there is a known model for selling a product or its features for a certain price, and specialization in support is easy to see how the product can be decomposed into two extreme cases.


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The production of a scalable product is fundamentally different from those products that have been made centuries before. It is so effective and beneficial that big business and the state will struggle to restrain such development. Through patent law and legal barriers, through the prohibition of threatening technologies such as Blockchain, through the use of hyper-infusion of funds. However, the movement of history cannot be stopped.


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